MTECHTIPS;-U.S. natural gas futures plunge 5% to lowest since March

MTECHTIPS-U.S. natural gas futures started the week with heavy losses on Monday, sliding to the lowest level since mid-March as updated weather forecasting models pointed to weak demand in the weeks ahead. U.S. natural gas for July delivery was at $2.898 per million British thermal units by 8:40 AM ET (1240 GMT), down 14.0 cents, or around 4.6%. It fell to its lowest since March 17 at $2.884 earlier in the session. A cool front will sweep across the eastern U.S. the next few days with heavy showers and powerful thunderstorms, thereby dropping highs into the upper 60s and 70s with little demand for heating or cooling. Longer-term models showed considerably cooler temperatures for late next weekend into the following week as weather systems over southern Canada advance more aggressively into the northern and eastern U.S. Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on summer heating demand. Gas use typically hits a seasonal low with spring’s mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning. Nearly 50% of all U.S. households use gas for heating. Total natural gas in storage currently stands at 2.709 trillion cubic feet, according to the U.S. Energy Information Administration, 10.6% lower than levels at this time a year ago but 8.4% above the five-year average for this time of year.
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